A decade of public service cuts “wasn’t actually austerity”, prime minister Boris Johnson incredibly contended today (June 29).
Speaking to the Radio Times this morning, Johnson admitted that the economic crisis caused by the coronavirus has been disastrous for the UK.
“This has been a disaster, let’s not mince our words, this has been an absolute nightmare for the country,” he said. “The country has gone through a profound shock. But in those moments you have the opportunity to change and to do things better. We really want to build back better, to do things differently, to invest in infrastructure, transport, broadband – you name it.”
Calling for a “Rooseveltian approach”, Johnson pledged the government would invest in public infrastructure and would reject austerity as it begins to devise a post-pandemic recovery plan.
“This is the time to invest in infrastructure, this is the time to make those long-term decisions for the good of the country,” he said. “You have to be careful and the chancellor will be setting out our plans in the spending review in the autumn.
“But in the end what you can‘t do at this moment is go back to what people called austerity – it wasn’t actually austerity but people called it austerity – and I think that would be a mistake.”
Labour leader Kier Starmer hit out against the prime minister for delaying the next budget until the autumn.
“It’s staggering that in light of the economic crisis that is about to descend upon us that we are not having a July budget that puts jobs at the centre of economic recovery,” Starmer told the BBC’s Radio 4 Today programme this morning (June 29).
‘Biggest ever’ job creation programme needed
The Labour leader called for a budget next month to tackle skyrocketing levels of unemployment that are only expected to get worse once the government’s furlough scheme begins to wind down in August and is set to end completely at the end of October.
Starmer said last week that he feared there could be as many as three million job losses in the months to come if action is not taken.
A new report out today from the Resolution Foundation said that the UK would need “the biggest ever peace-time job creation programme’ to recover from an economic crisis that has seen record unemployment.
The think-tank warned that the government’s job retention scheme, which currently covers 80 per cent of wages for workers who have been furloughed, must be extended throughout 2021 for the hardest-hit sectors such as hospitality to stop even bigger waves of redundancies that are expected in the months ahead.
In addition to a jobs creation programme, the Resolution Foundation called for targeted tax cuts to encourage new hiring, as well as job and training guarantees for young people which would “help tackle youth unemployment, and the long-term scarring effects it can have on young people’s careers”.
Commenting on the report, Resolution Foundation senior economist Nye Cominetti said that a second wave of unemployment later this year after the job retention scheme ends “could leave Britain with the highest unemployment levels in a generation”.
He added the government must take a “Full Monty” approach, which he said “should include a Job Protection Scheme to maintain employment in hardest-hit sectors, and the biggest ever peacetime job creation programme”.
“Major public investment in social care and retro-fitting homes could both spur job creation, and help meet the challenges of an ageing population and climate change,” he added.
“The success of the Job Retention Scheme in protecting family incomes has shown why it pays to be bold with policy decisions. That same ambition is needed in the next phase of the crisis.”
‘Fairer, greener’ economy call
And being “bold with policy decisions” is precisely what the British public wants, a new survey out today (June 29) has revealed, with only 6 per cent saying they want a return to the same type of economy that existed before the pandemic.
The YouGov poll commissioned by the New Economics Foundation also found that more than a third wanted to see big changes to the economy after the pandemic, while a further 28 per cent said they wanted to see moderate changes.
Nearly half of those polled said they believed the current crisis had made inequality worse, while 44 per cent said they were pessimistic about the future of the economy.
A number of leading figures and organisations, including the TUC, former head of the civil service and Labour peer Lord Kerslake, the Confederation of British Industry, the British Chambers of Commerce, and the former archbishop of Caterbury Rowan Williams, among more than 300 others, have jointly called for a ‘fairer and greener’ economy.
Commenting on the survey, Lord Kerslake told the Guardian, “As the country begins to emerge from the crisis, it is becoming clear that people want a better future, not simply to return to where we were before. As with big crises in the past – from wars to the Great Depression – it was universally agreed that there was no going back.
“And so we have to ask deep questions about what kind of society and economy we now want to build. The moment we are in is a challenge to us all: to governments, businesses, civil society and citizens. But it is a challenge to which, together, we can rise and build something better.”
The call from the Resolution Foundation for a job creation programme and the call from leading figures for a fairer economy comes as Unite hosted a Manufacturing Matters webinar last week, where union leaders called for similarly bold proposals.
“If ever there was a need for our nations, our devolved governments and our central government, to come together on a cross-party basis, with industry, mayors and trade unions to talk about what sort of economy we need, it is now,” said Unite assistant general secretary Steve Turner, speaking at the webinar.
“It’s not just as we come through Covid19 – we can rebuild and we can recover from this pandemic. But we have to plan for our future, how we green our economy, and to think about a just transition.
“We don’t leave communities or workforces in sectors that we know will transition [to green jobs], behind. We need to support them and have a 10 to 20-year plan and to carry communities with us, with the voice of working people at the forefront of that debate.”
By Hajera Blagg